Michigan Cuts Medicaid Funding for Inpatient Hospice Beneficiaries

Michigan will no longer reimburse the state’s licensed in-patient hospice providers for room and board for Medicaid beneficiaries, effective this week.

“This summer, our staff noticed inconsistencies in the way that we were reimbursing hospice providers. There are approximately 21 licensed hospice residence facilities in the state of Michigan, and we identified inconsistencies with 11 of these programs,” Angela Minicuci, public information officer for the Michigan Department of Community Health, told Home Health Care News. “In order to ensure we are fairly reimbursing all hospice providers consistently, we have decided to end room and board reimbursement.”

Similar to Medicare and most private insurance, room and board at hospice is not a covered benefit, she continued, adding that Michigan will continue to reimburse hospices for medical care of inpatients.


The decision, announced in August, will result in $2.5 million in projected annual cuts for fiscal year 2013-2014, according to hospice providers who say it will ultimately result in higher costs for the state.

“We have asked the state to reconsider these cuts because it will be more expensive for the state if it eliminates these services,” Gloria Brooks, CEO of Arbor Hospice in Ann Arbor, says in a Crain’s Detroit article. “These are high-risk patients and will get shifted back to hospitals for expensive care.”

Hospices affected by the cuts, starting Tuesday, include Angela Hospice Care Center in Livonia; Woodland Hospice, in Mount Pleasant; Hopice of North Ottawa Community, in Spring Lake; Hospice House of Mid-Michigan at Sparrow Hospital, in Lansing, and The Poppen Residence of Harbor Hospice, in Muskegon, among others. 


Another new requirement: hospices must be licensed as skilled nursing facilities to receive Medicaid inpatient hospice reimbursement. This will change existing standards starting in 2001 where Michigan has allowed 11 residential hospices to operate 150 nursing home beds designated for end-of-life care for Medicaid beneficiaries, said the Hospice and Palliative Care Association of Michigan.  

A hospice provider trade group has submitted an alternative proposal to the Department of Community Health that could delay the cuts by continuing inpatient hospice payments for six more months, according to Brooks.

“We remain committed to ensuring that Michigan families and their vulnerable family members receive quality care,” Minicuci says. “Medicaid beneficiaries may receive hospice care in the home, a nursing facility, hospital or hospice residence.”

Written by Alyssa Gerace